Tackling corruption for inclusive development
Bangladesh has transformed from a war-ravaged, resource-starved and acutely poverty-stricken least developed country (LDC) at independence in 1971, into a low middle income country by 2015. One of the fastest growing economies of the world for more than a decade now, the country is aspiring to achieve the upper middle-income status by 2031 and high income by 2041. As per the Perspective Plan 2021-41, extreme poverty will be eradicated by 2031 and zero poverty will be achieved by 2041.
Together with the consistently high GDP growth, Bangladesh has been performing enviably better than comparable countries in South Asia and beyond in terms of indicators like Human Development Index, Multidimensional Poverty Index, Gender Development Index, population growth reduction and life expectancy at birth.
This impressive performance, a genuine source of pride for every Bangladeshi, is however tainted by the fact that the country has been consistently lagging behind in terms of nearly every credible governance and corruption-related international assessments. These include the Rule of Law Index, Regulatory Quality Index, Government Effectiveness Index, Political Stability Index, Voice and Accountability Index, Press Freedom Index, Political Rights Index, Civil Liberties Index, Corruption Control Index, Bribery Risk Matrix and Corruption Perception Index.
Bangladesh's growth and development performance could have been much better and more inclusive and meaningful for the common people if it was accompanied by higher standards of governance and control of corruption the cost of which is as high as 2-3 percent of GDP, as revealed by a former finance minister. Add to this, the skyrocketing illicit financial outflow from the country of over USD 12 billion annually as per credible estimates, which do not include the laundered money to destinations in Europe, North America, South and Southeast Asia by conventional means like hundi. The Canadian Begum Para and Malaysian second home, of which Bangladeshi money launderers are among the leading clients, are just some examples of how illicit financial transfers are used to accumulate ill-gotten properties out of the country.
The Corruption Perception Index (CPI) 2021 has ranked Bangladesh 147th among 180, having scored 26 out of 100, well below the global average of 43, the benchmark for moderate success in corruption control. We are embarrassingly the second worst performer in South Asia after Afghanistan, and fourth lowest among the 31 countries of the Asia-Pacific region.
In terms of impact on daily life, people's sufferings from bribery and other forms of corrupt practices in key sectors of service delivery remain very high. Around 66.5 percent of households were victims of one or other form of corruption according to the National Household Survey on Corruption in service delivery, released by Transparency International Bangladesh in June 2018. It further showed that more than 89 percent of those who paid bribes were forced to do so because it was the only means to access public services—an unbearable daily life burden of immorality of the corrupt.
While there exists a school of thought that in certain societies, due to inefficient bureaucracies and institutions, corruption might facilitate economic activity, there is a consensus on its negative impact on economic growth and distribution. Corruption is protected and perpetuated by biased policy regimes and faulty governance practices that favour the rich and well-connected. Statistically significant positive association exists between corruption and income inequality. The more pervasive corruption is in a society, the higher is income inequality which in turn, leads to further perpetuation of corruption. Similar positive association exists between corruption and poverty—the higher the level of corruption the higher the level of poverty.
Countries that top the CPI also rank high in Social Inclusion Index, while those in the bottom scale of CPI are also found to score low in terms of Social Inclusion Index, which indicates that in such countries the degree of marginalisation and exclusion is higher. Covid crisis recovery and stimulus package in Bangladesh reflected bias for predominant business lobbies whereas delivery for the poor and underprivileged were peripheral rather than part of a strategically designed response. In addition, unaccountable use of public financial resources, especially in procurement, distribution and delivery resulted in an upsurge of corruption. While Covid affected the whole of society, the poor, Covid-driven poor and disadvantaged suffered the most for corruption-driven reduced and discriminatory access to public services in such areas as health, education, social protection and financial support.
There are other qualitative fault-lines of our achievements. We are proud for our commendable progress over the years in terms of food security. However, according to FAO-Unicef report on food security and nutrition in the Asia-Pacific region for 2021, prevalence of moderate or severe food insecurity in Bangladesh during 2018-2020 were among 52 million people or 31.9 percent of the total population whereas 17.1 million (10.5 percent) confronted severe food insecurity. Notably the number of people facing moderate to severe food insecurity increased by nearly 1.6 million from 2014-16 when it was 50.4 million.
While we have succeeded in bringing down poverty from 80 percent in 1971 to below 20, things are not as rosy if one considers the fact that Bangladesh is not among the top 15 countries reported by World Bank to have been most successful in reducing poverty over the last 15 years, though both GDP and per capita income increased significantly during the period.
On the other hand, Bangladesh has found itself high (3rd in 2019) in the global list of the fastest growing countries in terms of the super rich, who are projected to rise by 11.4 percent in the next five years according to Wealth-X. The Global Inequality Lab reports that 44 percent of Bangladesh's total national income was held in 2021 by only 10 percent high income people, while the bottom 50 percent possessed only 17.1 percent of GDP. Just one percent of the population hold more than 16 percent of total national income. The latest available World Bank data for 2016 also shows a similar picture as the income share of the highest 20 percent was 41.4 percent against only 14.3 percent of the lowest 20 percent. Income inequality measured by Gini Coefficient as per the Household Income and Expenditure Survey of the Bangladesh Bureau of Statistics has been reported to have risen to 0.482 in 2016 from 0.458 in 2010.
Abuse of power and corruption are among the key factors behind such unequal distribution of social and economic opportunities, and increasing exclusion of the poor and disadvantaged from the benefits of growth. The government recognises combating corruption as a priority. The Perspective Plan 2021-41 pledges under its target up to 2031, "governance reforms for improvement of effectiveness through administrative reform as continuing and gradual process based on both objective need and subjective public demand, productivity, transparency and accountability and reduction of corruption and abuse of power and enforcing the rule of law". It also pledges to strengthen the Anti-Corruption Commission, expedite the judicial process and allocate resources for the development and application of e-governance. Beyond 2031, it pledges "effective government and enforcement of the rule of law with complete transparency and accountability within the framework of pluralistic democracy and further emphasis on e-governance".
Despite lacking in specifics, this recognition of the need to promote better governance ensuring transparency, accountability and corruption reduction is important. Equally important is Bangladesh's commitment under SDG 16 to "promote a peaceful and inclusive society… provide access to justice for all and build effective, accountable and inclusive institutions at all levels".
Under target 16.5, Bangladesh further commits to "substantially reduce corruption and bribery in all their forms"; under 16.4 to significantly reduce illicit financial flows, strengthen the recovery and return of stolen assets; and under 16.10 to "ensure public access to information and protect fundamental freedoms." Such lofty commitments, especially the pledge of "leaving no one behind", can only be achieved through a paradigm shift away from the current quantitative bias in development towards a qualitative and inclusive approach for which it is indispensable that policies and practices of anti-corruption are specifically mainstreamed.
The Prime Minister's repeatedly pronounced zero tolerance for corruption reiterated in the coronavirus context represents the highest level of political commitment. However, corruption has flourished due to increasingly deep-rooted challenges of governance that are conducive to corruption rather than its control. On top are sharply decreasing scope of accountable governance due to dysfunctionality of key institutions of democracy and National Integrity System bedevilled by partisan political influence as well as chronic deficit of rule of law, high concentration of power, and shrinking space and capacity for civil and political dissent.
Corruption is protected and promoted by the revolving door between politics and businesses in acute form where politics at every level is the other name for profit-making opportunity for abusing the power gained though political linkage which also ensures collusion with governmental and institutional power. Politically important positions including that of public representatives are often obtained not so much by virtue of political participation and experience or by people's mandate to serve public interest, but by investing money and muscle for profit-making.
Politics has also for long been a zero-sum game where a monopolistic control of the political space guarantees the winner all the spoils that come along. Business and profit-making opportunity by abusing public and government resources from politically gained positions including that of public representatives is considered a matter of legitimate entitlement. Business, investment, public recruitment and contracting, land grabbing, embezzlement, extortion and influence peddling have become the object of not only inter-party but also intra-party turf-war involving various forms of same-side violence including deaths associated with an unholy competition for opportunities for self-enrichment. Governance and public affairs are marred by conflict of interest, nepotism and a pervasive practice of collusive non-compliance. As a result, instead of accountability, the corrupt, especially the big fish, enjoy impunity.
In this context, whether or not corruption can be effectively controlled to ensure that aspirations of a middle to high income Bangladesh are inclusive and meaningful for common people will depend on if and to what extent our political leaderships will have the appetite to truly serve public interest rather than self-interest. What is needed is a genuine political will at all levels, not only on paper but in practice without fear or favour. The corrupt must be brought to justice ensuring equality of all before law, irrespective of the identity and status of the individual. The institutions of the national integrity system must be transparent, efficient, accountable and effective, both individually and collectively.
Consistent with the National Integrity Strategy, the introduction of a business integrity programme is long overdue, with the aim of creating ethical business practices including collective action against corruption. A robust beneficial ownership law needs to be enacted to deter corruption in the private sector as well as various forms of illicit financial transfers, especially money laundering. To ease public harassment in service delivery sectors digitalisation and online transactions system must be extensively introduced and robustly practiced.
A robust system of conflict-of-interest management is needed to ensure that power-holder's private or business interest is not promoted by decisions and/or actions taken by abusing official position. It should ensure that public interest related decisions including design and implementation of development projects are based on merit putting the public interest first.
The aspirations of the Perspective Plan to eradicate extreme poverty by 2031 and achieve zero poverty by 2041 must include policies and practices to beak the vicious cycle of corruption-exclusion-corruption so that the growing disparities accompanying economic growth are arrested and reversed. We need to turn away from predilections for growth in numbers and elite-biased policies, and move on to putting the people first and give precedence to quality and inclusion in development.
Prioritising public interest will help realisation in the government that they do not always have all the answers and need to engage with and listen to the people. It would necessitate unhindered scope of the people to raise voice for accountability. Space must be enhanced, not curtailed, for civil society and media to exercise their rights and responsibilities as enshrined in the Constitution, so that power is consistently held to account. Failure to do so will further perpetuate corruption and social exclusion and render the development aspirations meaningless for the common people.
Iftekharuzzaman is Executive Director, Transparency International Bangladesh.